SalMar deals out €227 Mn in dividends

Aslak Berge

Norway-based salmon-farmer, SalMar, on Thursday reported an improvement in overall operations and lower costs for the fourth quarter, as it transferred to shareholders the fruits of costs-cutting and hard-won contract coverage.

The better financial results are primarily related to processing more volume, better management and stronger biological controls. Company operational EBIT came in at EUR 73 million for the three-month period, up 27 percent year-on-year.

“A higher harvested volume, an improved biological situation and efficient operations have helped SalMar to post yet another strong financial result,” said CEO Trond Williksen.

“The improvement in underlying operations for the fourth quarter in a row is the result of investments in competence and capacity over time. And these investments will continue. Our ambition to be the lowest-cost producer remains in place. SalMar remains determined to increase its production volume, and is therefore working actively along several lines to realise this objective. In the long term, this will contribute to continued sustainable growth for SalMar.”

Growing harvest
SalMar generated gross operating revenues of EUR 289 million in the fourth quarter 2017, up from EUR 258 million in the year-ago period. The Group harvested 39,900 tonnes in the quarter, compared with 26,500 tonnes in the same quarter the year before.

EBIT per kilogram came to EUR 1.82, down from EUR 2.17 per kg in the fourth quarter 2016. The average spot price in the same period fell by NOK 17.74 per kg.

The company’s fish-farming in central Norway saw a steady decline in lice numbers that helped reduce costs. The positive trend is expected to continue in the first quarter of 2018 on better preparedness, capacity and competence to deal with biological challenges, the company said, adding that the costs will linger.

Lice battles
In northern Norway, however, the lice count rose in some areas. Fish transferred to sea farms in the autumn of 2016 were hardest hit. More delousing will also push up costs in the coming quarters, the company said.

SalMar’s sales and processing unit posted an operational EBIT of EUR 18 million in the quarter to erase NOK 180.5 million lost posted in the year-ago period. Better management helped, as did having 44 per cent of the harvested volumes “sold under contract at prices in excess of the average spot price for the period”.

“In addition, higher harvest volumes contributed to increased capacity utilisation and greater operating efficiency in the harvesting and secondary processing activities. As at mid-February, the contract rate stands at around 48 per cent for the first quarter 2018 and at around 26 per cent for 2018 as a whole,” the company said.

Norway volume
“The global supply of Atlantic salmon is expected to increase by 6 per cent in 2018. Combined with expectations of continued strong and stable demand, this indicates a balanced salmon market, with the outlook for continued strong earnings in the time ahead,” company leadership wrote.

In 2018 as a whole, SalMar expects to harvest around 143,000 t in Norway (96,000 t in central Norway and 47,000 t in northern Norway).

Norskott Havbruk (Scottish Seafarms) expects to harvest approx. 26,000 t in 2018, while Arnarlax expects to harvest some 11,000 t.


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